Paihia Property Holdings Corporate Trustee Limited v Body Corporate 190356

[2020] NZHC 3030

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000593

[2020] NZHC 3030

IN THE MATTER

of ss 316 and 317 of the Property Law Act 2007

IN THE MATTER

of an application by PAIHIA PROPERTY HOLDINGS CORPORATE TRUSTEE

LIMITED for an order modifying or extinguishing right of way easements

BETWEEN

PAIHIA PROPERTY HOLDINGS CORPORATE TRUSTEE LIMITED
Applicant

AND

BODY CORPORATE 190356

First Interested Party

CHIN YUN HOLDINGS LIMITED

Second Interested Party

Hearing:	On the papers
Judgment:	17 November 2020

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Tuesday, 17 November 2020 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Anthony Harper, Auckland. Loo & Koo, Auckland.

PAIHIA PROPERTY HOLDINGS CORPORATE TRUSTEE LTD v BODY CORPORATE 190356 [2020] NZHC 3030 [17 November 2020]

[1]    Paihia Property Holdings Corporate Trustee Ltd, or Paihia Property, applied under s 316 of the Property Law Act 2007 for an order modifying an easement. The interested parties opposed.  On 22 September 2020, I granted the application.1  I said I considered Paihia Property entitled to 2B costs unless the parties disagreed. They do. Paihia Property argues it is entitled to indemnity costs or increased costs. The interested parties argue costs should lie where they fall because Paihia Property has been granted an “indulgence”.

[2]    The threshold for indemnity costs is deliberately high. Costs of this nature are unwarranted. The interested parties’ conduct before the filing of proceedings is irrelevant.  Rejection of  a settlement offer is not grounds for indemnity costs under  r 14.6(4) of the High Court Rules 2016. And, that the interested parties might have hoped to restrict development on neighbouring land does not, without more, mean they acted egregiously in resisting modification of their property rights under the easement.

[3]    Increased costs are not warranted either. Rule 14.6(3)(a) is only satisfied if the nature of the proceeding or a step in it requires substantially more time than allocated in band C. Paihia Property does not address this aspect. Paihia Property points to time needed to consider “evidential issues” after the interested parties filed new evidence out of time. However, I do not consider this action contributed unnecessarily to the time or expense of the proceeding or a step in it for the purposes of r 14.6(2)(b)(i). Finally, the interested parties’ refusal to settle does not warrant increased costs under r 14.6(3)(b)(v) because the one settlement offer they declined (necessarily) required their capitulation.

[4]    The interested parties resist costs on the argument Paihia Property obtained an indulgence, which, as Anderson J said in Holdgate v Holdgate, “conventionally is made at the expense of a costs award against the party obtaining the indulgence”.2 The principle has been affirmed by the Court of Appeal.3

1      Paihia Property Holdings Corporate Trustee Ltd v Body Corporate 190356 [2020] NZHC 2462.

2      Holdgate v Holdgate HC Auckland CP303/96, 24 September 1996 at 3.

3      Cunningham v Butterfield [2014] NZCA 213, (2014) 22 PRNZ 521 at [52].

[5]    This case is not governed by the principle. Jurisdiction to modify an easement is conferred on this Court by statute. Paihia Property exercised no more than its statutory right in seeking modification—and was successful.

[6]    The 2A costs items are not contentious. Claims for appearances at mentions and callover are, for  these  were  on  the  papers.  I  disallow  for  this  reason.  Paihia Property claims one day for the site visit. The actual visit took less than half a day, but everyone had to travel. Given this, I consider one day reasonable. So, I order costs of $19,995 ($17,925 and disbursements of $2,070) to Paihia Property.

[7]    This leaves one matter. I made a timetable to address an application by the interested  parties  for  compensation.  Their  evidence  and  submissions  were  due 3 November 2020. The interested parties did not comply with the timetable. Instead, on 3 November they filed a memorandum of counsel recording they had lodged an appeal of my judgment; and seeking deferral of the issue of compensation until the appeal had been determined. The interested parties say anticipated valuation evidence in relation to compensation could prejudice its position in the Court of Appeal.

[8]    Unsurprisingly, Paihia Property opposes variation of the timetable. It notes the possibility of compensation was raised late; and suggests any potential prejudice to the appeal could be addressed by the valuation evidence being adduced on a without prejudice basis.

[9]    I share Paihia Property’s frustration. The interested parties have not complied with the timetable and present its variation as fait accompli. However, I consider valuation now better addressed after the appeal. If the appeal succeeds, compensation falls away. If the appeal fails, an application for compensation will need to respect the factual conclusions upheld or untouched by the appeal. So, the application may also fall away if events take this turn. Moreover, proceeding on a without prejudice basis could become messy.

[10]   I quash the existing timetable for these reasons. The parties may revert to me once the appeal is determined.

……………………………..

Downs J